Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 9, Problem 40P
Summary Introduction
To calculate: The amount that should be paid by Mark Ventura for the
Introduction:
The current value of an investment or an asset is termed as its PV. It is calculated by discounting the
Deferred Annuity:
A contract that helps an investor delay their incomes from receiving it until their desirable time for receiving the income comes, is termed as a deferred annuity. It is divided into two phases; first is the saving phase in which an investor only invests the money in the account and second is the income phase in which the investors start getting the payments. It can be fixed or variable.
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Mark Ventura has just purchased an annuity to begin payment at the end of 2011 (that is the
date of the first payment). Assume it is now the beginning of the year 2009. The annuity is
for $8,000 per year and is designed to last 10 years. If the interest rate for this problem
calculation is 13 percent, what is the most he should have paid for the annuity?
Dean Gooch is planning for his retirement, so he is setting up a payout annuity with his bank. He wishes to receive a payout of $1,500 per month for twenty-five years.
(a) How much money must he deposit if his money earns 7.3% interest compounded monthly? (Round your answer to the nearest cent.)
(b) Find the total amount that Dean will receive from his payout annuity.
You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent.
Required: How much would you need to have saved in your retirement fund to achieve this goal?
a) Assume that the perpetuity payments start on the day of your retirement.
b) Assume that the perpetuity payments start one year from the date of your retirement.
Chapter 9 Solutions
Foundations of Financial Management
Ch. 9 - Prob. 1DQCh. 9 - How is the present value of a single sum related...Ch. 9 - Prob. 3DQCh. 9 - Does inflation have anything to do with making a...Ch. 9 - Adjust the annual formula for a future value of a...Ch. 9 - If, as an investor, you had a choice of daily,...Ch. 9 - What is a deferred annuity? (LO9-4)Ch. 9 - Prob. 8DQCh. 9 - Prob. 1PCh. 9 - Prob. 2P
Ch. 9 - a. What is the present value of $140,000 to be...Ch. 9 - If you invest $9,000 today, how much will you have...Ch. 9 - Prob. 6PCh. 9 - Your uncle offers you a choice of $105,000 in 10...Ch. 9 - Your father offers you a choice of $105,000 in 12...Ch. 9 - Prob. 9PCh. 9 - How much would you have to invest today to receive...Ch. 9 - If you invest $8,500 per period for the following...Ch. 9 - Prob. 12PCh. 9 - Mrs. Crawford will receive $7,600 a year for the...Ch. 9 - Phil Goode will receive $175,000 in 50 years. His...Ch. 9 - Sherwin Williams will receive $18,500 a year for...Ch. 9 - Carrie Tune will receive $19,500 for the next 20...Ch. 9 - The Clearinghouse Sweepstakes has just informed...Ch. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - At a growth (interest) rate of 10 percent...Ch. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Juan Garza invested $20,000 10 years ago at 12...Ch. 9 - Prob. 26PCh. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - You need $28,974 at the end of 10 years, and your...Ch. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 33PCh. 9 - Prob. 34PCh. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Del Monty will receive the following payments at...Ch. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Prob. 41PCh. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Your younger sister, Linda, will start college in...
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